Rebuilding GM's corporate culture

Ten weeks ago, she became the most powerful woman in corporate America. By Tuesday afternoon, when she appeared before a congressional subcommittee probing an engineering defect blamed for the deaths of at least 13 motorists, Mary Barra also was the most embattled.

"I am the chief executive officer of General Motors," she began. Then outlined her plan to discover what went wrong at her company and remake a corporate culture whose shortcomings have become apparent to regulators and consumers around the world.

Under sometimes withering interrogation by members of a House subcommittee, Barra acknowledged GM engineers had first noticed more than a decade ago the design flaw that has since been implicated in at least 13 fatal accidents, but added she has yet to figure out why the affected cars weren't recalled until February 2014.

"Sitting here today, I cannot tell you why it took years," Barra said. "But I can tell you that we will find out." She pledged that an investigation led by former federal prosecutor Anton Valukas will go "where the facts take him," and that GM will use the results of the probe "to help assure this does not happen again."

Barra can hardly be faulted for demanding a fuller understanding of events that took place years before she assumed leadership of GM before deciding which personnel and/or procedural changes are necessary. But internal documents GM provided to congressional investigators point to a corporate culture in which cost considerations took precedence over quality and safety. It was reassuring to hear the company's CEO address that crucial problem head on.

"We've moved from a cost culture to a customer culture," Barra said, conceding that the transition to "the new GM" is a work in progress. Asked how the new GM strikes the balance between cost and safety, she replied flatly: "We don't."

Convincing consumers and regulators that GM has begun to walk her uncompromising safety talk will be the defining task of Barra's tenure.

Her first steps have been impressive: more than 6 million vehicles recalled since her appointment as CEO; the appointment of Kenneth Feinberg, who oversaw the settlement of claims arising from the Sept. 11, 2001, attacks and the BP oil spill, to recommend a compensation plan for victims of the faulty ignition switch; and face-to-face meetings with surviving family members.

During her testimony Tuesday, Barra declined to rule out the possibility that GM would invoke its 2009 bankruptcy to limit its liability for claims that arose before its reorganization. But she surely understands that any attempt to hide behind the bankruptcy shield would be inconsistent with her promise that "today's GM will do the right thing" for its customers.

All that can be said after Tuesday's hearing is that Barra has outlined a reasonable strategy for recapturing the public's trust. As she herself recognizes, the road to restored credibility will be long and steep, and any attempt to shade or conceal the truth from customers or regulators will have severe consequences.

But Barra is saying the right things. Her company's very survival hinges on her capacity to transform her uncompromising words into standards and procedures to which every GM employee adheres.

Detroit Free Press, Mich., April 2, 2014

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Rebuilding GM's corporate culture

Ten weeks ago, she became the most powerful woman in corporate America.